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  • Brand&Reputation:ALeadershipPerspectiveReputationConference2008

    HenleyBusinessSchoolJohnMadejskiCentreforReputation

    November25,2008

    ElliotS.Schreiber,Ph.D.

    ClinicalProfessor

    BennettS.LeBowCollegeofBusinessDrexelUniversity

    Philadelphia,Pennsylvania,USA

    elliot.s.schreiber@drexel.edu

  • SeeingtheWorldfromthePerspectiveofCorporateLeadership

    Managing Financial

    Resources

    Attracting &Aligning the

    TalentAssuring Execution

    Financial targets & non-financial drivers Shareholdercommunication

    Fiscal policy Forecasting & budgeting Capital expenditures

    Workforce acquisition, retention & performance management

    Performance reporting & review Initiative management

    Source: Balanced Scorecard Collaborativebscol.com

    The Board holds the CEO responsible for 4 key objectives:

  • BasicPremise ChiefCommunicationsorMarketingOfficers(CCOs,CMOs)canhelpthe

    CEOachievehis/herkeyobjectivesthroughastrategic*BrandandReputationManagementprocess

    (*thewayinwhichanorganisationseekstoachieveadvantagethroughtheconfigurationofresourcesandorganisationalassetstomeettheneedsofthemarketandfulfillstakeholderexpectationsinawaythatdifferentiatestheorganisationfromcompetitors)

    ThekeyvalueaddfortheCCOand/orCMOistoputinplaceaprocessto: Identifytheorganisationsvaluesandclosegapsbetweenarticulatedandreal,

    actionablevalues Helptheorganisationmaintainaperspectiveonallstakeholders,theirrelationships

    andinteractions

    Buildandmaintainrelationshipswithkeystakeholderstocreatevalue Connectcorporatebrandtoreputationinawaythatdrivesbusinessoutcomes

  • SixLeadershipChallenges/Issues1. BoardsandCEOsfeelunpreparedformanagingreputationrisk:

    Issues: Theinsurancecompany,AON,surveyed360globalCEOsonriskconcernsin

    2007

    The#1concernof31categoriesofriskpresentedwasReputationRisk 48%ofCEOsfelttheircompanywasillpreparedforreputationrisk Boardsrecognizethecriticalityofriskmanagementandareengagedinthe

    reviewofriskissues

    2. CompaniesoftenlooktoCorporateAdvertising,CorporateSocialResponsibility,CrisisManagementandPhilanthropyasreputationmanagement: Issues:

    Thesearetactics,notstrategy;corporateleadershipisexpectedtobestrategic

    CEOsneedreputationandassociatedrisktobemanagedstrategically,asonewouldmanageotherrisks(e.g.,market,capital,legal,etc.)

  • SixLeadershipChallenges/Issues3. Reputationhasnotbeenclearlydefined:

    Issues: Wecannotmanageormeasurereputationifwedonotknowwhatitis Withoutclarity,reputationbecomesacatchallphaseorasubstitutetermfor

    publicrelationsorcorporateadvertising Nowbecomingusedasaeuphemismforsearchengineoptimisation

    4.Communicationsprofessionalsofteneschewthetermbrand,associatingitwithmarketingandproducts:

    Issues: Brandisbetterunderstoodthanisreputationbymanagementbecauseitis

    taughtinbusinessschoolsandusedbystrategyfirmsasanumbrellaterm Organisationalbrandisinterrelatedwithreputationagoodreputationrequires

    thattheorganizationhaveawellconsideredandactionablecorporatebrand

  • SixLeadershipChallenges/Issues5. BrandandReputationManagementaretypicallyfocusedon

    communicationstoexternalstakeholders: Issues:

    Actionsmorethancommunicationsbuildreputation Employeesarethemostimportantstakeholdergroupforanyorganisation

    Thereisoftenafailuretounderstandthatrelationshipsbuildvaluecustomerserviceandstakeholderrelationsareoftenthepointsinnonconsumerproductscompaniesatwhichbrandisdefinedatreputationisbuilt

    6.BrandandReputationManagementaretooimportanttobelefttoanyonefunction: Issues:

    Brandandreputationmanagementmustbeholistic,orenterprisewideweneedtointegrateacrosstheorganizationanddownthroughstrategicbusinessunitsandregions

    Boardsneedtobefocusedonreputationsinceitdrivesordiminishesvalueandnotsimplydelegatethistomanagement

  • WhatisReputation?FortheOrganisation:reputationisanintangibleassetthat:

    Thatoffersapromiseofperformance

    Canbeusedtoshapeexpectationsandperceptionsaboutthecompanysdifferentiationandabilitytomeetneedscomparedtocompetitors

    Enhancesorganisationalvaluethroughrelationshipsthatbuildtrustandvalue

    ForStakeholders:reputationisthebeliefthatanorganisationisdistinguishedfromitspeers:

    Totheextentthatstakeholdersbelievethatthebehavioursandcommunicationsoftheorganisationresonatewiththeirneedsandinterestsandarebetterthancompetitiveofferings,theywillbeinfluencedtobehavetowardtheorganisationindesirableways

    Theabilityofthefirmtoconsistentlydistinguishitselffromcompetitorsovertimecreatesahaloeffectthatprovidesgreaterresiliencetodifficultiesversuscompetitors

  • TheBrandReputationConnectionBrandisownedbythecompany;Reputationisownedbystakeholders

    Employees

    Competitors

    BusinessPartners

    Media

    Government

    NGOs

    Investors

    Reputation

    Brand

    ORGANISATION BRAND The self definition of how an

    organisation wants to be perceived anddifferentiated from competitors

    What factors create positive and differentiated perceptions?

    How can we influence those factors?

    ORGANISATION REPUTATION The vote by stakeholders as to

    whether or not the brand attributes andbehaviours resonate

    Analysts

    Communities

    CoreAttributes

    &behaviours

  • The Brand-Reputation-BusinessOutcome Value-Chain Model

    9

    Satisfaction

    Retention/Attraction

    Trust

    Satisfaction

    Reputation

    Turnover

    Trust

    CorporateBrand

    SymbolsCommunications

    Behaviour

    EmployeePerspective

    CustomerPerspective

    SalaryCareerCulture

    OrganisationCulture,Values&Strategy

    Reputation

    Price Quality Service

    Adapted from Gary Davies, Corporate Reputation and Competitiveness, p 76.

  • Fea

    r, U

    ncer

    tain

    ty &

    Dou

    bt

    Complexity of Information in DecisionLow High

    High

    Brand and Reputation Strategies Dependon The Nature of the Organization

    6

    Driver: Personal Need Brand Strategy: House of BrandsDemand Created by: Advertising & Direct MailValue of Corporate Reputation: VERY LOWValue of Product Brand: VERY HIGH (P&G, Unilever)

    Driver: Social AcceptanceBrand Strategy: Endorsed Brands Demand Created by: Advertising & Product EndorsementsValue of Corporate Reputation: LOW to MODERATEValue of Product Brand: HIGH (Air Jordan, Martha Stewart, )

    Driver: Safety & SecurityBrand Strategy: Branded HouseDemand Created by: Relationships and 3rd Party ReferralsValue of Corporate Reputation:

    VERY HIGHValue of Product Brand: VERY LOW (Dell, Cisco, AT&T)

    Driver: Ingredient PerformanceBrand Strategy: Sub-Brands Under a MasterbrandDemand Created by: Integrated Communications & ReferralsValue of Corporate Reputation: HIGHValue of Product Brand: HIGH (Intel, Pharmaceuticals, Marriott)

    10

  • CreatingaStrategicProcess External:CreateaFrameofReferenceforyour

    company: Whatstakeholderscanexpectfromyouintermsofproducts/service,investment,

    employment,civicinvolvement,etc. Theframeworkshouldbecomeanorganisationalimperative:

    toengagemanagersandemployees tocreateneededorganisationalchangeandactionsconsistentwith

    communications

    Internal:DevelopaReputationScorecardtohelpmanageprogress:

    Commonmodelofreputationthatisagreedto

    ReputationRiskSWOTanalysisfortheorganization ObjectivesforCustomers,EmployeesandFinancialResults,aswellasfor

    RelationshipswithKeyStakeholders

    Metricsforeachobjective

  • ValuesaretheFoundationofReputation

    ReputationConsistent, Trustworthy behaviours

    Consistent Communications

    Employee Commitment

    Policies & Practices

    Business Objectives

    Values

    Internal Controls &

    Governance

    Sta

    keho

    lder

    Per

    cept

    ions

    Resource Allocation

  • Firstordervalues:Thosethatareintrinsictotheorganisation,embeddedinculture,monitoredandreinforcedconnectedtothevaluesofstakeholders

    SecondOrderValues:Thosethatanorganisationcommunicatestostakeholderstoinfluencemarketperceptions,butwhichdonotnecessarilymeetthetestoffirstordervalues

    Intrinsicvs.ExpressedValues

    13

  • Financial Returns are a Proxy ofEmployee and Customer Satisfaction

    Employee satisfaction and commitment are related to how employeesperceive their organisation is seen externally (Carmeli & Freund,Corporate Reputation Review, 2002)

    There is a strong relationship between employee & customersatisfaction, and the interaction between these drives financial value(Girouard, Waukesha, Stowers, Barr & Franklin, Chicago School ofProfessional Psychology, 2007)

    Companies perceived as good places to work earn returns double thatof others (Alex Edmunds, Knowledge@Wharton, 2007)

    HOWEVER Schultz & Hatch, The Expressive Organisation (2007) found that 90%

    of employees did not understand the companys brand; 70% were notcommitted it

    14

  • The EBP is an internal brand for employees, bothcurrent and future prospects

    Builds understanding and actions of employees withthe external brand

    Addresses two questions: 1. Why would a talented person want

    to work here versus someplace else?

    2. What can employees do to help enhancestakeholder value?

    15

    Employee Brand Proposition(EBP)

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    PuttingItAllTogether

  • LeadershipThroughaCouncilofStakeho